Cost-per-Click (CPC)

Cost-per-click (CPC) is a common billing method in the field of online marketing and digital advertising. With this form of billing, the advertiser (advertiser) pays for each click on his ad that is placed on a website, in a search engine or in social media.

CPC is an important metric for measuring the effectiveness of advertising campaigns and assessing the value of the traffic generated by an ad. It is often used in conjunction with keywords, particularly in pay-per-click (PPC) campaigns where ads are targeted to specific search terms. The CPC can vary depending on the platform, industry, competition and quality of the ad.

The formula for calculating the CPC is:

CPC = total cost of the campaign / number of clicks.

A higher CPC means that the advertiser has to pay more per click, while a lower CPC reduces the cost per click. Optimising CPC is an important aspect of planning and running online advertising campaigns to ensure a balance between costs and benefits achieved.

Example calculation:

Suppose a company runs a Google Ads campaign in which it advertises for certain keywords. The total cost of the campaign is €500 and a total of 100 clicks on the ads were generated during the campaign.

Total cost of the campaign = 500 €
Number of clicks = 100

The CPC is calculated by dividing the total costs by the number of clicks.

So in this example, the cost-per-click (CPC) is $5. This means that the company paid an average of $5 for each click on its ads in this campaign.